State Farm exiting Florida market
Published: January 29,2010
TALLAHASSEE, Fla. — Thousands of State Farm Florida property insurance customers will be seeing notices in their mailboxes next week saying their policies will not be renewed, a company spokesman said Thursday.
The first wave of notices will be mailed Monday to a selected number of the company’s policyholders who were set to renew Aug. 1, spokesman Chris Neal said.
It’s part of an agreement reached with the Office of Insurance Regulation in December. The company is cutting 125,000 policies in the next 18 months to reduce its liability in hurricane-prone Florida, where State Farm insures nearly 714,000 homeowners.
State Farm, which quit writing new homeowners policies in Florida two years ago, will send its final notices early next year for policies that would be otherwise renewed in the last week of July 2011. Most of the policies not being renewed are in high-risk coastal areas.
The Florida company is a subsidiary of the Bloomington, Ill.-based State Farm Insurance, one of the world’s best capitalized insurers.
Policyowners losing State Farm coverage may still retain their State Farm agent if they wish to have them service their replacement coverage. State Farm agents are independent contractors, Neal said.
As part of its deal with state regulators, State Farm dropped its plan to withdraw from the property insurance market in the state.
The deal, which permits State Farm to increase rates up to 14.8 percent on home and condominium owners, resolved a dispute over conditions Insurance Commissioner Kevin McCarty had placed on the company’s previously announced withdrawal plan.
The company said last January it would stop writing property insurance in Florida after Insurance Commissioner Kevin McCarty rejected a 47.1 percent rate increase. State Farm officials said they needed the big increase to remain financially viable.
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